Banking services boost thanks to technology

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Financial technology will help change the services of banks.

Strong impact

At present, the legal regulations for the development of digital banking or Fintech in Vietnam are basic but not full, so the implementation of this area is difficult. However, according to experts, Fintech has a strong impact on the financial-banking ecosystem. In particular, the traditional banking system is strongly affected, both on a positive and negative aspect. Positive impacts include: Increasing the level of financial access, increasing automation, reducing transaction costs, upgrading and improving banking services and supporting banks. The bank is adversely affected when Fintech is a direct competitor of the bank in a number of sectors and the risk of technological crime in the banking sector also soars.

Therefore, many large technology companies in Vietnam such as DPT, Viettel, CMC, VNG, VC Corp focused on Fintech, but these companies still mainly approached through the development of electronic payment instruments. To develop, the "problems" were solved by combining and co-operating between Fintech companies and traditional banks.

A survey by the State Bank of Vietnam (SBV) in 2017 showed that 72% of Fintech Vietnam chose to cooperate with banks in doing business, providing products and services, because this is the premise for improving access to financial-banking services.

According to Mr. Hoang Dinh Thang, Chairman of Lien Viet Post Bank, the deployment of digital banking as well as the development of Fintech companies are facing many difficulties and challenges as follows: new technology is limited, the development of high-tech applications is slow; the investment in technology research and development is huge; banks may face problems in risk management in terms of strategy, legal, financial and fraud issues. However, this is a trend in the world so domestic banks and technology companies can not stand on the sidelines.

Know how to take advantage

According to IDG Vietnam's 2017 Report on Banking Services user behaviors, trends in Vietnam and e-banking solutions are increasing, which is more popular and highly valued with time savings of 81% for users using e-banking solutions compared to 21% in the 2015 survey. Therefore, leveraging technology to grow banking services is no longer new to commercial banks. However, this will be a difficult question for banks with limited financial resources and lack of proper orientation and direction.

As one of the banks that usually apply technology, Tien Phong Commercial Joint Stock Bank (TPBank) has established a digital banking ecosystem with services such as electronic savings, digital banking for individualsand businesses, e-commerce services. In particular, the bank also applies artificial intelligence technology in the management system, and detects abnormal risks in banking operations.

According to Ms. Bui Thi Thanh Huong, the representative of TPBank, the technology has changed the habits, behavior and customer service approach, so customers have become the center, which forces banks to change to fit well.

Meanwhile, the Viet's non-physical card (called Vi Viet) has made many improvements. In addition to the use of electronic wallet, electronic payment gateway, online payment means, Vi Viet now offers more online banking services such as: deposit savings, account balance inquiry, savings book, mortgage loan, which attracted a large number of customers.

Thus, the "face" of the banking industry will change when applying to digital technology. However, the deployment requires many solutions. Therefore, Mr. Hoang Dinh Thang said that both commercial banks and regulators had to make changes. Accordingly, commercial banks must study and develop a rational roadmap to move, which should be along with the bank's ecosystem development. The risk management solutions for digital banks should be developed as this is a potentially risky security area. In particular, Mr. Thang suggested that when banks have enough capital, they should develop their digital banking services by themselves. Otherwise, they should cooperate with Fintech companies in order to have more reasonable directions.

Bad debts of more than VND 100 trillion are solved under Resolution 42 VCN- That was the information given at the meeting on banking performance in the first 6 months ...

On the side of management agencies, experts said that the State Bank should accelerate the process of research on Fintech, creating a legal corridor for the application of modern technology in the field of finance and banking, simultaneously setting up the Research Team on Digital Banking to assess the potentiality and trends in the development and transfer of the digital banking model in Vietnam to have policies to support banks in the transition.